IT sector seeks government support in view of increasing global protectionism

New Delhi, Dec 10 (IANS) The IT industry on Saturday sought government support in view of the increasing global trends of protectionism and anti-globalisation, during the pre-Budget consultative meeting with Finance Minister Arun Jaitley, an official statement said.

“It was brought forth that government support was required for IT sector in view of increasing trends of protectionism and anti-globalisation abroad,” said a Finance Ministry statement.

The rapid changing nature of technology in IT field also makes it imperative to focus on reserarch and development in IT, hence, the government needs to promote innovation in IT, the industry representatives told Jaitley at the pre-Budget consultative meeting with stakeholders from IT sector.

In his remarks, Jaitley said: “India’s competence in IT-Software is recognised globally and in recent times, software development and Information Technology Enabled Services (ITeS, including BPO &amp; KPO) industry had emerged as one of the most dynamic and vibrant sectors in India.

“The government recognises the potential of IT sector, hence electronic systems and IT &amp; BPM (Business Process Management) are included among 25 sectors in ‘Make in India’ programme. The electronic market in India is one of the largest in the world and is expected to reach $400 billion in 2020.”

During the meeting, various suggestions were received from the participants for boosting the IT sector.

Issues about speed and penetration of broadband in India and number of Wi-Fi hotspots in the country were discussed.

“It was suggested that over-ground towers and underground fiber cable network need to be improved in a big way. At the consumer end, smart phone prices need to be further brought down so that broadband is more accessible to masses,” the statement said.

“It was appreciated in the discussion that green shoots are visible in smart phone manufacturing industry in India and manufacturing of these phones is increasing rapidly. Also, street price of these Indian made smart phones is competitive when compared to Chinese made phones,” it said.

So the next logical focus of Indian smart phone manufacturers should be to target the export market, it added.

To further boost electronic manufacturing in country, suggestions were made to extend the duty differential scheme to all Information Technology Agreement (ITA) goods, specifically for personal computers (desktop, laptop).

“To create an ecosystem for electronics and IT hardware manufacturing, proposal for a ‘Component Trading Hub’ was discussed. It would bring down logistics costs by creating robust infrastructure for connectivity,” it said.

Participants also insisted on the need to encourage populated PCBs manufacturing in the country by restricting their direct imports, it added.

A representative from a robotic firm requested for incentives to boost the robotics sector in country which is non-existent currently.

To increase PC penetration, it was proposed that easy loans (3-4 per cent per annum) should be provided by banks for the purchase of personal computers and cost of PC should be allowed for deduction under Section 80C of Income Tax Act, it said.

“Concerns were shown in the meeting that increasing digitisation should not lead to increased digital divide in the country. So internet need to be more open, transparent and easily accessible to all,” the statement said.

“Suggestions were given to improve cyber security structure in India and establish a cyber test range. It was proposed that there should be a mechanism for reporting any vulnerability detected in a government software system by any private person/agency,” it added.